Monte Carlo Retirement Calculator

The Monte Carlo Retirement Calculator lets you explore your client's financial future including best and worst case scenarios. Most retirement calculators only show you the expected case, but the timing of investment returns can change your situation significantly. See an example...

Getting Started

1. Obtain the Calculator from www.AICPA.org.
2. Download and install a Java Runtime Environment (JRE) if necessary. The JRE is available as a free download here.
3. Run the program by double clicking on the file you downloaded from AICPA. This file should have a .jar extension. If your computer does not recognize the .jar extension as an executable, you need to install the JRE. Please see Step 2 and the FAQs for more information.
4. Accept the End User License Agreement.
5. Step-By-Step Instructions show how to use the calculator and interpret the results.

Please check the FAQs if you have any questions. If you cannot find an answer there, you may contact us at support@pivotpointadvisors.com. We generally respond to inquiries within two business days.

How does it work?

This Monte Carlo Retirement Calculator projects your income, expenses, assets and liabilities into the future. Income and expenses are projected to increase at a fixed inflation rate and liabilities are projected to decrease as you pay off the balances.

Assets are projected forward by randomly selecting a year between 1974 and 2004 and assuming that the asset generates a return equal to that year's return. This process is repeated until we reach the specified number of years for the projection. We repeat this process multiple times to map out the range of possible outcomes.

In effect we are using a random sampling of historical returns to simulate future returns. While this approach has some merit, it is always possible for the market to change fundamentally so that historical returns have no implications for future returns.

Detailed Description...